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India Tourism Report Q3 2009Published by: Business Monitor International Published: Jun. 22, 2009 - 51 Pages Table of Contents
AbstractQ109 Tourist Arrivals Slow SharplyData released by India’s Ministry of Tourism in April 2009 indicated that tourist arrivals fell by 12.9% inMarch 2009, with 471,627 tourists arriving in the month. This follows a similar decline in February, withonly 501,885 arrivals, compared to 561,393 in February 2008. However, even these declines represent aslight improvement from the January figure, when arrivals slumped a dramatic 16.6% y-o-y. As a result,revenues also fell in Q109, with tourist-related revenue falling to INR4,437 crore in March, representingan 11.9% y-o-y decline. The abrupt decline in tourist arrivals in Q109 is not surprising, despite relatively strong growth of 5.6%y-o-y for 2008 as a whole. The November terrorist attacks in Mumbai, which specifically targeted placesfrequented by tourists, will have a major medium-term impact on tourism. Although the Indian authoritieshave publicised efforts to improve security and identify the perpetrators, the perception of India as amoredangerous country will impact holiday choices, particularly for Western tourists. Moreover, with fewertourists choosing to holiday abroad during the global economic downturn, those that do may now beattracted to countries perceived as safer than India. While this will have little impact on diaspora visitors,particularly from the UK and North America, these underlying factors will contribute to a greater thanexpected decline in India’s tourism industry in 2009. Government Launches Tourism Incentive Package The Indian government is well aware of the risks that the Mumbai bombing and the global economicdownturn pose to the country’s large tourist industry. As a result, in May the Ministry of Tourismlaunched a month-long Incredible India campaign in major North American cities, including Boston, LosAngeles, San Francisco and Toronto. These will be complemented by an ongoing roadshow campaign,taking in countries such as Singapore, Australia, Japan, Korea and the UK. Moreover, incentives arebeing offered directly to travellers and tour operators. Some package offers include complementaryflights for a travelling companion, additional sightseeing tours and extra nights’ accommodation when astay is booked. Diverging Fortunes For Domestic Airlines Preliminary data suggests that two of India’s major domestic carriers will post improved results in FY Q42008-2009 (January-March 2009). Both Jet Airways and its subsidiary SpiceJet are likely to reduce theirlosses, following the implementation of a strategy aiming at cutting back less profitable routes andreducing operational costs. Jet lost INR384.5 crore in Q4, while JetSpice lost INR123.6 crore in the sameperiod. Both losses were largely caused by heavy operational costs resulting from the surging price of fuelin H108. With this cost reducing, Jet is expected to post of loss of INR200 crore in Q4, while JetSpice’sloss may reduce to as much as INR50 crore. However, rival carrier Kingfisher Airways is taking longer torecover from the 2008 slowdown, with losses expected to rise to INR350 crore in Q4, from INR200 crorein Q408. Kingfisher has experienced a significant rise in cost following its launch of international flightsin late 2008, although it hopes to recoup these losses over full-year 2009. Get Full Details About This Report >> |
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